State Farm filed a broad update to its Alabama Businessowners policy forms, introducing several new exclusions and coverage revisions that reflect emerging liability risks, including generative artificial intelligence, PFAS, human trafficking, data privacy, and space weather. The changes apply to new business beginning January 1, 2027, and renewals beginning March 1, 2027.

Among the most notable additions is a new exclusion eliminating coverage for bodily injury, property damage, and personal and advertising injury arising out of generative artificial intelligence, defined as machine-based learning systems capable of creating content such as text, images, audio, video, or code. A separate products liability endorsement also excludes bodily injury and property damage arising from generative AI.

The filing also introduces new liability exclusions for per- and polyfluoroalkyl substances (PFAS), data privacy violations, unauthorized access or disclosure of confidential information, assault and battery, human trafficking, silica or silica-related dust, and abuse or molestation. In addition, State Farm expands its war exclusion to explicitly apply to cyber means and adds a new property exclusion for space weather events such as solar flares, coronal mass ejections, and geomagnetic storms, while preserving coverage for resulting fires.

Beyond exclusions, the insurer updates property coverage by excluding digital tokens such as cryptocurrencies and NFTs from covered property, increasing the distance for certain covered property from 100 feet to 1,000 feet from the insured premises, adding limited coverage for business personal property stored in portable storage units, and revising definitions for securities to address certificated and uncertificated securities. The filing also updates cancellation, premium, and claims information provisions and adds mutual disclosure requirements for third-party litigation funding agreements.